-
Fiscal consolidation
-
Reduction of subsidies
-
Tax base expansion
-
Exchange rate flexibility
-
Monetary tightening
These measures stabilize the macro framework, but they also slow domestic growth — a key tension for equity markets.
2️⃣ The Two-Phase Market Reaction Pattern (Very Important)
Across decades, PSX reactions to IMF programs follow a repeatable two-phase pattern:
Phase 1: Confidence & Liquidity Shock (Positive)
-
Default risk collapses
-
FX reserves stabilize
-
Rupee volatility reduces
-
Foreign & local confidence improves
👉 Result: Sharp market rallies within days or weeks.
if ( function_exists( 'pgntn_display_pagination' ) ) pgntn_display_pagination( 'multipage' );
